D. Dowd Muska


Launch Wars: The Revenge of Elon Musk

December 05, 2013

Elon Musk’s face must hurt, from all the smiling.

The naturalized American -- he emigrated from South Africa, with a two-year layover in Canada -- was once derided as a dilettante. From its beginning, Musk’s 2002 startup, Space Exploration Technologies, had an almost comically grandiose agenda. It would dramatically lower the cost of putting materiel and men in orbit, and in the process, overturn the nation’s ossified, bureaucratized, and astronomically expensive blueprint for spaceflight. “SpaceX” would offer freight and taxi services to NASA and the Pentagon, launch telecom satellites, rent room in microgravity labs, and eventually, make Homo sapiens a two-world species.

In its early years, the privately held company struggled. Developing a rocket in-house, from scratch, required more than enthusiasm and optimism. The first three attempts to loft payloads on SpaceX’s Falcon 1 failed. Northrop Grumman sued, alleging that employees who had been lured away by Musk supplied proprietary information. Again and again, deadlines weren’t met.

It wasn’t until September 2008 that the Falcon 1, on its fourth try, successfully placed a tiny, dummy payload into orbit. By then, critics believed they had enough evidence to confirm the longstanding claim that space is fantastically hard and amazingly costly, and that fedpols, Boeing, and Lockheed Martin -- not “hobby rocketeers” -- should call the shots off-planet. Startup? Try upstart.

It’s been five years. Things have changed. SpaceX’s woes are in the past, blasted out of memory by a string of successes:

• July 2009: A Falcon 1 launched a satellite for the Malaysian government.

• June 2010: In its maiden voyage, the Falcon 9 -- a larger version of the Falcon 1 -- orbited a mockup of SpaceX’s Dragon capsule.

• December 2010: A Falcon 9/Dragon conducted a proof-of-concept flight for NASA’s Commercial Orbital Transportation Services program.

• May 2012: A Falcon 9/Dragon delivered cargo to the International Space Station (ISS) for the first time.

• October 2012: Second Falcon 9/Dragon ISS mission.

• March 2013: Third Falcon 9/Dragon ISS mission.

• September 2013: A larger version of the Falcon 9 put a satellite into polar orbit for the Canadian Space Agency. (In addition, three smaller payloads were launched.)

Doubters be damned. SpaceX has had an incredible half-decade run. But on December 3rd, Musk’s marvel achieved its greatest triumph: the completion of a geostationary-transfer delivery. The satellite belongs to SES, one of the largest telecoms on Earth. The Luxembourg-based firm, with dozens of birds in orbit, could have chosen Europe’s Ariane or Russia’s Proton to launch SES-8. But it gambled on the new guy, and the bet paid off.

With rock-bottom prices and an impressive record of performance, SpaceX is poised to grab a huge share of the globe’s competitively bid launches. That’s the business model Musk and his team should pursue, because a key customer is not to be trusted.

As the aforementioned cargo runs to the ISS indicate, a sizable chunk of SpaceX’s revenue comes from NASA. And more D.C. bucks are likely on the way, as the Falcon 9/Dragon system seeks contracts for crewed flights.

If there’s not enough political will to defund America’s astro-bureaucracy, taxpayers can take some solace in the contracting out of space transportation. (The shuttle, at a hideous $1.5 billion per liftoff, was a fiscal black hole.) But NASA’s policies are set by politics, not markets. The revenue bestowed on SpaceX today could quickly vanish. Scenarios are easy to envision. Cost-cutting, forced by the budding-boondoggle Space Launch System, might lead to the ISS’s deorbiting. Launch-services procurement could shift to companies that wield greater lobbying power. Voter support for the space program is sure to plummet if a deadly accident occurs in orbit.

SpaceX would be wise to reduce its reliance on NASA. Like all pols, the agency’s vote-grubbing congressional benefactors are fickle, cowardly, and selfish. Enlightened enterprises minimize their investors’ exposure to the mess in Washington.

Fortunately, there are other ways to make money in the Final Frontier. The market for lofting commercial, military, intelligence, and civil satellites stretches across six continents. The Falcon 9’s manifest is long, and growing. And Musk’s low-cost rockets have the potential to foster space tourism, orbital entertainment, microgravity manufacturing, and asteroid mining.

SpaceX is doing the “impossible,” through visionary leadership, innovative engineering, hyper-efficient labor, and a realization that the establishment’s approach lost all credibility decades ago. One day, the pioneering corporation’s influence on space may rank alongside the Internet’s impact on communications and fracking’s boost to the U.S. hydrocarbon industry.

No one’s making fun of Elon Musk anymore.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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